South Lake Union Upzone Legislation Heads for Final Vote

City council member Lisa Herbold may introduce new last-minute amendment to challenge the Grand Bargain.

Yesterday morning, the Seattle City Council Planning, Land Use, and Zoning Committee unanimously approved legislation that would allow developers to build taller buildings in exchange for affordable housing in South Lake Union. However, one council member dissented over how much developers should contribute to affordable housing.

The bill, as it is currently written, would allow developers building projects in South Lake Union and the downtown core to build higher—in some areas as high as 440 feet for residential towers—in exchange for either setting aside a certain percentage of units as affordable, with rents restricted to roughly 60 percent of the area’s median income, or charging a per-square-foot fee to help fund nonprofit affordable housing developments through the city.

The Mandatory Housing Affordability (MHA) program, a policy of give-and-take between developers that the city colloquially dubbed the Grand Bargain, is the cornerstone of the Housing Affordability and Livability Agenda recommendations—Seattle mayor Ed Murray’s blueprint for addressing the city’s housing shortage and sky-high rents. The city Office of Planning and Economic Development estimates that the MHA program in South Lake Union and downtown will generate 2,100 affordable units out of 4,200 citywide.

A rendition of how much taller buildings could get with the MHA height bonus. The exact height bonuses vary by zone.

After the unanimous approval of both the original bill and a slew of amendments, council member Lisa Herbold (District 1, West Seattle) introduced a last-minute quasi amendment that directs Council Central Staff—the city council’s in-house nonpartisan policy wonks—to run the numbers on theoretically raising the proportion of affordable units and square-footage fees that developers must pay to get the height bonus.

Depending on the results, this analysis of the bill’s affordability requirements could foreshadow the introduction of a substantive amendment by Herbold when the legislation is before full council. Adjusting the affordability requirements on developers in South Lake Union could pose a threat to the Grand Bargain struck between the city and developers during the HALA task force negotiations back in 2015. (Developers warned the city council last fall against making changes to the deal and risking its collapse.)

Ketil Freeman, a Council Central Staff supervising analyst confirmed that the affordability requirements in the bill are based on a calculation formula from the dated South Lake Union incentive zoning program—a policy akin to the MHA program which was implemented in 2013 when the city last up zoned South Lake Union; developers later sued the city over the program.

In her amendment, Herbold asks Council Central Staff to apply the formula for calculating MHA affordability requirements in other parts of the city to South Lake Union. She claims that, based on numbers that her office crunched, this calculation produced more affordable housing. “We get a different outcome as it relates to production of affordable housing,” she asserted.

Freeman agreed that the total unit and fee output under Herbold’s theoretical scenarios would be higher, but added that the formula in the current South Lake Union proposal had a political calculus. “The lay of the land here definitely has to do with politics and the decisions that were made around the Grand Bargain,” he said.

Herbold’s directive to Council Central Staff blindsided her colleagues to an extent. A staffer in her office told Seattle Met that Herbold decided to include the directive just before the committee meeting—the staffer also said that Herbold’s office had received numerous constituent concerns with the legislation’s affordability requirements—and had not shared it with any of her colleagues prior. Council member Mike O’Brien (District 6, Ballard), said during the meeting that he needed time to “digest” Herbold’s inquiry.

Committee chair and District 4 council member Rob Johnson, who represents Wallingford and the University District, was openly wary of tweaking the affordability requirements in the current legislation. Specifically, he stated that any changes to the policy could dissuade developers with projects under way from participating in the MHA program.

“If we’re going to study or consider a couple other options at full council, I’d want us to make sure we have a real discussion about those policy trade-offs,” he said.

The vast majority of public commenters spoke in favor of the legislation, including executive director of the Housing Development Consortium, Marty Kooistra, and Downtown Seattle Association vice president of advocacy and economic development, Don Blakeney.

But other constituents who spoke during the committee’s public comment period shared Herbold’s enthusiasm for exploring raising the affordability requirements of the policy, including Xochitl Maykovich, an organizer with Washington Community Action Network, as well as a representative from the Seattle Women’s Commission and Jon Grant, the former director of the Tenants Union—and the second-time candidate for the open position, at-large city council seat currently held by Tim Burgess.

“This up zone is going to be an incredible boon to some of the wealthiest developers in Seattle,” said Grant during his testimony. “We must be asking more from the private sector.”